Internal Culture: A Key Indicator for Success
The benefits of electronic payables (also known as electronic accounts payable or EAP) have been widely reported, but maybe it is still unclear if, or how, these solutions can help your organization. Setting aside demographics like size, internal culture is a key indicator. As described below, there are three types of organizations for which ePayables can add value for different reasons. Based on the following, where does your organization fit? Answering this question can help you create an appropriate ePayables business case to sell management on the idea.
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The Savvy
Savvy organizations actively focus on electronic payments, and establish effective policies and procedures to support their goal. In a perfect world, everyone would be in this category.
As a complement to traditional Purchasing Cards, ePayables act as a bridge to new territory for card program expansion and the purchases typically not allowed on a P-Card. Advantages over ACH payments include the ability for organizations to:
better manage cash flow (e.g., consolidated monthly payments to the card/solution provider versus individual payments to each supplier)
earn revenue share
The Skeptical
Some organizations, driven by fear, are still reluctant to implement a traditional P-Card program or only use P-Cards on a very limited basis. They favor checks and remain skeptical about electronic payments. ePayables might appeal to them on a psychological level. Management can take comfort in how ePayables support an invoice-based purchase-to-pay (P2P) process like they have always used and simply mean a change in payment method.
If an ePayables solution can be the bridge for moving an organization forward and away from cumbersome checks, then it signifies progress, even if all else remains the same. Down the road, they might be more open to the powerful combination of ePayables and P-Cards.
The Sabotaged
Lax management can sabotage a traditional P-Card program. If employees and management alike use cards to conduct wasteful shopping sprees and they are not held accountable, then ePayables can provide a bridge back to better organization control over spending.
Help your organization bridge together its payment strategy through the inclusion of an electronic payables solution.
What About “None of the Above?”
Finally, there are organizations who have determined no need for ePayables because traditional cards work well for them for all kinds of purchases. They have already minimized checks and achieved P2P process efficiencies, so they are savvy as-is. They should keep it up and continue to evaluate P2P processes for improvement opportunities.